UPM and Sappi Sign a Non-binding Letter of Intent to Form a Graphic Paper Joint Venture

UPM-Kymmene Corporation and Sappi Limited have signed a non-binding letter of intent to form a graphic paper joint venture. The Joint Venture would include the entire UPM Communication Papers business and Sappi’s graphic paper business in Europe. The Joint Venture would be owned 50/50 by UPM and Sappi. It would operate as an independent company, managing its own operations, resources and decisions within agreed shareholder boundaries.

The proposed Joint Venture represents a decisive response to the structural changes in the European graphic paper industry. It would offer a path to strengthen the resilience of the industry and provide long-term commitment and supply security to graphic paper customers.

Massimo Reynaudo, President and CEO of UPM

 “UPM Communication Papers has reliably delivered value to customers as well as UPM shareholders. It has been the foundation upon which UPM has expanded its broad portfolio of sustainable material solutions. The planned Joint Venture would provide the best future for the UPM Communication Papers business, focus UPM’s portfolio and strengthen our balance sheet,” added Reynaudo.

Securing long-term resilience and sustainability
The transaction would create a more efficient, adaptable and sustainable graphic paper business. It would create a structurally competitive cost base and supply security for the European and global customers.

By strategic reallocation of production volumes to the most efficient paper machines, the Joint Venture would achieve more sustainable capacity utilisation and stronger operational performance, while continuing to serve customers with a broad portfolio of graphic paper products.

Overall, the Joint Venture would rationalise supply in an industry burdened by declining demand, structural overcapacity and high energy costs. It would contribute to a more balanced and resilient European market, and make the industry better positioned to withstand market challenges and increasing imports to Europe.

UPM Communication Papers has already today an ambitious climate action roadmap to reduce product emissions by up to 70% by 2030, supporting customers in achieving their climate targets. The Joint Venture would further enhance these opportunities. By optimising capacity utilisation, enhancing operational efficiencies and continuing to invest in decarbonisation, the Joint Venture could reduce its overall climate impact, helping to advance the EU’s Clean Industrial Deal objectives.

About UPM
UPM is a material solutions company, renewing products and entire value chains with an extensive portfolio of renewable fibres, advanced materials, decarbonisation solutions and communication papers. UPM’s performance in sustainability has been recognised by third parties, including EcoVadis and the Dow Jones Sustainability Indices. It operates globally and employs approximately 15,800 people worldwide, with annual sales of approximately EUR10.3 billion. Its shares are listed on Nasdaq Helsinki Ltd.

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